|A quarter of a century ago, on 3 January 1985, the Ombudsman for Life Assurance scheme was launched.
It was the first financial services ombudsman scheme to be founded in South Africa. Judge PJJ Wessels, a retired judge from the Appellate Division (now the Supreme Court of Appeal), took office as the first Ombudsman.
The establishment of the scheme arose out of the realisation that consumers and the industry needed a method – outside the court system – to resolve disputes that they could not resolve between themselves. In the first year 31 insurers agreed to be bound by the rules of the scheme.
The key elements of the scheme were:
- the ombudsman would be independent and would not take instruction from anyone regarding the exercise of this authority;
- the service would be free to complainants, and the industry would bear the costs of the scheme;
- the ombudsman could take considerations of equity into account;
- the process would be confidential;
- complainants would not lose their right to follow the court process if they were dissatisfied with the resolution;
- there was no monetary limit on the complaints that fell within the jurisdiction.
The institution of an ombudsman scheme as an out-of-court dispute resolution mechanism is now firmly established but was ground breaking at the time. Almost all financial services in South Africa now have an alternative dispute resolution scheme such as an ombudsman or adjudicator whether voluntary or statutory. The concept of an ombudsman has also spread to other industries as diverse as the motor industries and dental services. Worldwide the ombudsman concept is a growing trend.
Our own scheme has grown and developed over the years (with a slight change of name). In the first year of operation 55 written complaints were received; in comparison, last year our office received 9 087 complaints. In line with schemes both locally and internationally our scheme is constantly improving and adapting to the needs of complainants and the industry. What has not changed is the emphasis on mediation and conciliation to settle disputes, although rulings (binding on insurers) can be made as a last resort. The tradition of appointing a retired judge as an ombudsman has also continued to the present.
It is fitting that in this landmark year we will host, together with the other voluntary financial services ombudsman offices, the 2010 Conference of the International Network of Financial Services Ombudsman Schemes (Info 2010). The conference, which takes place annually, will be hosted at the BMW Pavilion in the Cape Town Waterfront from 28 to 30 September 2010. The conference website is http//www.info2010.org.za. Registration will open February 2010.
LIFE INSURANCE IN SOUTH AFRICA – A COMPENDIUM
A book giving a perspective of life insurance from the point of view of this office has just been published. The book was written by Judge PM Nienaber (the previous Ombudsman) and Prof. MFB Reinecke of our office, while other staff members assisted the authors with input. Part user-manual, part legal textbook, liberally dotted with case studies and examples, the book is aimed at anyone with an interest in the life insurance industry – policyholders, financial advisers, consumer groups, members of the industry, the legal fraternity and the financial press. Although the book is about life insurance as encountered and observed by this office its scope is wider than that. The authors used experts outside the office to assist where wider issues are discussed.
The book is published by LexisNexis and will be available in academic bookshops at a cost of approximately R357,00.